Exhibit 4.2
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INDENTURE
among
SLM STUDENT LOAN TRUST 1997-3,
as Issuer,
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of September 1, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Usage
SECTION 1.1 Definitions and Usage...........................................3
SECTION 1.2 Incorporation by Reference of Trust Indenture Act...............3
ARTICLE II
The Notes
SECTION 2.1 Form............................................................4
SECTION 2.2 Execution, Authentication and Delivery..........................4
SECTION 2.3 Temporary Notes.................................................5
SECTION 2.4 Registration; Registration of Transfer and Exchange.............5
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes .....................7
SECTION 2.6 Persons Deemed Owner............................................8
SECTION 2.7 Payment of Principal and Interest; Note Interest
Shortfall; Note Interest Carryover..............................8
SECTION 2.8 Cancellation...................................................10
SECTION 2.9 Release of Collateral..........................................10
SECTION 2.10 Book-Entry Notes...............................................10
SECTION 2.11 Notices to Clearing Agency.....................................11
SECTION 2.12 Definitive Notes...............................................12
ARTICLE III
Covenants
SECTION 3.1 Payment to Noteholders.........................................12
SECTION 3.2 Maintenance of Office or Agency................................13
SECTION 3.3 Money for Payments To Be Held in Trust.........................13
SECTION 3.4 Existence......................................................15
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SECTION 3.5 Protection of Indenture Trust Estate .........................15
SECTION 3.6 Opinions as to Indenture Trust Estate..........................16
SECTION 3.7 Performance of Obligations; Servicing of Trust Student
Loans..........................................................16
SECTION 3.8 Negative Covenants.............................................20
SECTION 3.9 Annual Statement as to Compliance..............................21
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms............21
SECTION 3.11 Successor or Transferee........................................23
SECTION 3.12 No Other Business..............................................24
SECTION 3.13 No Borrowing...................................................24
SECTION 3.14 Obligations of Servicer and Administrator......................24
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities..............24
SECTION 3.16 Capital Expenditures...........................................24
SECTION 3.17 Restricted Payments............................................24
SECTION 3.18 Notice of Events of Default....................................25
SECTION 3.19 Further Instruments and Acts...................................25
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture........................25
SECTION 4.2 Application of Trust Money.....................................27
SECTION 4.3 Repayment of Moneys Held by Paying Agent.......................27
SECTION 4.4 Auction of Trust Student Loans.................................27
ARTICLE IV
Remedies
SECTION 5.1 Events of Default..............................................28
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.............30
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee ..........................................31
SECTION 5.4 Remedies; Priorities...........................................33
SECTION 5.5 Optional Preservation of the Trust Student Loans...............36
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SECTION 5.6 Limitation of Suits............................................36
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest.........................................37
SECTION 5.8 Restoration of Rights and Remedies.............................37
SECTION 5.9 Rights and Remedies Cumulative.................................38
SECTION 5.10 Delay or Omission Not a Waiver.................................38
SECTION 5.11 Control by Noteholders.........................................38
SECTION 5.12 Waiver of Past Defaults........................................39
SECTION 5.13 Undertaking for Costs..........................................39
SECTION 5.14 Waiver of Stay or Extension Laws...............................40
SECTION 5.15 Action on Notes................................................40
SECTION 5.16 Performance and Enforcement of Certain Obligations.............40
ARTICLE VI
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee....................................41
SECTION 6.2 Rights of Indenture Trustee....................................43
SECTION 6.3 Individual Rights of Indenture Trustee.........................44
SECTION 6.4 Indenture Trustee's Disclaimer.................................44
SECTION 6.5 Notice of Defaults; Seller Insolvency..........................44
SECTION 6.6 Reports by Indenture Trustee to Noteholders....................45
SECTION 6.7 Compensation and Indemnity.....................................45
SECTION 6.8 Replacement of Indenture Trustee...............................46
SECTION 6.9 Successor Indenture Trustee by Merger..........................47
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee..................48
SECTION 6.11 Eligibility; Disqualification..................................50
SECTION 6.12 Preferential Collection of Claims Against Issuer...............50
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders.......................................50
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SECTION 7.2 Preservation of Information; Communications to
Noteholders....................................................50
SECTION 7.3 Reports by Issuer..............................................51
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money............................................52
SECTION 8.2 Trust Accounts.................................................52
SECTION 8.3 General Provisions Regarding Accounts..........................54
SECTION 8.4 Release of Indenture Trust Estate..............................55
SECTION 8.5 Opinion of Counsel.............................................55
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders....................................................56
SECTION 9.2 Supplemental Indentures with Consent of
Noteholders....................................................57
SECTION 9.3 Execution of Supplemental Indentures...........................59
SECTION 9.4 Effect of Supplemental Indenture...............................60
SECTION 9.5 Conformity with Trust Indenture Act............................60
SECTION 9.6 Reference in Notes to Supplemental Indentures..................60
ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption.....................................................61
SECTION 10.2 Form of Redemption Notice......................................61
SECTION 10.3 Notes Payable on Redemption Date...............................62
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ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc. ................... 62
SECTION 11.2 Form of Documents Delivered to Indenture Trustee...............64
SECTION 11.3 Acts of Noteholders..........................................66
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies.......................................................66
SECTION 11.5 Notices to Noteholders; Waiver.................................67
SECTION 11.6 Alternate Payment and Notice Provisions........................68
SECTION 11.7 Conflict with Trust Indenture Act..............................68
SECTION 11.8 Effect of Headings and Table of Contents.......................69
SECTION 11.9 Successors and Assigns.........................................69
SECTION 11.10 Separability...................................................69
SECTION 11.11 Benefits of Indenture..........................................69
SECTION 11.12 Legal Holidays.................................................69
SECTION 11.13 Governing Law..................................................69
SECTION 11.14 Counterparts...................................................70
SECTION 11.15 Recording of Indenture.........................................70
SECTION 11.16 Trust Obligations..............................................70
SECTION 11.17 No Petition....................................................70
SECTION 11.18 Inspection.....................................................71
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APPENDICES, SCHEDULES AND EXHIBITS
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Trust Student Loans
SCHEDULE B Location of Trust Student Loan Files
EXHIBIT A Form of Note
EXHIBIT B Form of Note Depository Agreement
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INDENTURE dated as of September 1, 1997, among SLM
STUDENT LOAN TRUST 1997-3, a Delaware business trust (the "Issuer"), CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION, a national banking association, not in
its individual capacity but solely as trustee on behalf of the Issuer (the
"Eligible Lender Trustee"), and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee and not in its individual capacity (the "Indenture
Trustee")
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of the Issuer's
Floating Rate Student Loan-Backed Notes (the "Notes"):
GRANTING CLAUSE
The Issuer and, with respect to the Trust Student Loans, the
Eligible Lender Trustee hereby Grant to the Indenture Trustee, as trustee for
the benefit of the Noteholders, effective as of the Closing Date all of their
right, title and interest in and to the following:
(a) the Trust Student Loans, and all obligations of the Obligors
thereunder including all moneys accrued and paid thereunder on or after the
Cutoff Date and all guaranties and other rights relating to the Trust Student
Loans;
(b) the Servicing Agreement, including the right of the Issuer to cause
the Servicer to purchase Trust Student Loans from the Issuer under circumstances
described therein;
(c) the Sale Agreement, including the right of the Issuer to cause the
Seller to repurchase Trust Student Loans from the Issuer under circumstances
described therein and including the rights of the Seller under the Purchase
Agreement;
(d) the Purchase Agreement, to the extent that the rights of the Seller
thereunder have been assigned to the Issuer pursuant to the Sale Agreement,
including the right of the Seller to cause the Student Loan Marketing
Association to repurchase Trust Student Loans from the Seller under
circumstances described therein;
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(e) the Administration Agreement;
(f) each Guarantee Agreement, including the right of the Issuer to
cause the related Guarantor to make Guarantee Payments in respect of the Trust
Student Loans;
(g) the Trust Accounts and all funds on deposit from time to time in
the Trust Accounts, including the Reserve Account Initial Deposit, and all
investments and proceeds thereof (including all income thereon); and
(h) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
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ARTICLE I
Definitions and Usage
SECTION 1.1 Definitions and Usage. Except as otherwise
specified herein or as the context may otherwise require, capitalized terms used
but not otherwise defined herein are defined in Appendix A hereto, which also
contains rules as to usage that shall be applicable herein.
SECTION 1.2 Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
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ARTICLE II
The Notes
SECTION 2.1 Form. The Notes, together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form set
forth in Exhibit A, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders), all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Notes for original issue in an aggregate principal amount of
$2,484,850,000. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount except as provided in Section 2.5.
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Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in the minimum denomination of
$1,000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 Temporary Notes. Pending the preparation of
Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture determined to be
appropriate by the Responsible Officer of the Issuer executing the temporary
Notes, as evidenced by his or her execution of such temporary Notes.
If temporary Notes are issued, the Issuer will cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in Section 3.2, without charge to the
Noteholder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 2.4 Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
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If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for
other Notes in any authorized denominations and a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Noteholder thereof or such Noteholder's attorney duly authorized
in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act.
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No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Notes, but the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i)
any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Issuer and the Indenture Trustee
such security or indemnity as may be required by each of them to hold the Issuer
and the Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of Section
8-405 of the UCC are met, the Issuer shall execute and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within 15 days shall be due and payable, or
shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section,
the Issuer may require the payment by the Noteholder thereof of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of, interest (and any
Note Interest Carryover), if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest; Note Interest
Shortfall; Note Interest Carryover. (a) The Notes shall accrue interest as
provided in the forms of Notes set forth in Exhibit A, and such interest shall
be payable on each Distribution Date as specified therein, subject to Section
3.1. Any installment of interest (and any Note Interest Carryover) or principal,
if any, payable on any Note which is punctually paid or duly provided for by the
Issuer on the applicable Distribution Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered on the Record
Date by check mailed first-class, postage prepaid to such Person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Distribution Date or on the Note Final Maturity Date for such
Note which shall be payable as provided below. The funds represented by any such
checks returned undelivered shall be held in accordance with Section 3.3.
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(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of Note set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of each class
of the Notes shall be due and payable, if not previously paid, on the Note Final
Maturity Date for such class of Notes and on the date on which an Event of
Default shall have occurred and be continuing if the Indenture Trustee or the
Noteholders of the Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders entitled thereto. The Indenture
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Distribution Date on which the
Issuer expects that the final installment of principal of and interest (and any
Note Interest Carryover) on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Distribution Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such Installment. Notices in connection
with redemptions of Notes shall be mailed to Noteholders as provided in Section
10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay the resulting Note Interest Shortfall on the following
Distribution Date as provided in the Administration Agreement.
(d) The Note Interest Carryover for each Distribution Date shall be
payable on each Distribution Date solely to the extent of funds required and
available to be distributed to Noteholders by the Indenture Trustee pursuant to
Section 2.7C.10, 2.8C(D), 2.8D or 2.8E of the Administration Agreement. Any Note
Interest Carryover payable on any Distribution Date shall be paid to the Person
in whose name such Note (or one or more Predecessor Notes) is registered on the
applicable Record Date by check mailed first-class postage prepaid to such
Person's address as it appears on the Note Register on such Record Date, except
that, unless Definitive Notes have been issued pursuant to Section 2.12, with
respect to the Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be
made by wire transfer in immediately available funds to the account designated
by such nominee. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3.
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SECTION 2.8 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
SECTION 2.9 Release of Collateral. Subject to Section 11.1 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officers' Certificate of the Issuer, an Opinion of Counsel and
Independent Certificates in accordance with TIA xx.xx. 314(c) and 314(d)(1) or
an Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates.
SECTION 2.10 Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner shall receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
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(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee, and their
respective directors, officers, employees and agents, may deal with the Clearing
Agency for all purposes (including the payment of principal of and interest and
other amounts on the Notes) as the authorized representative of the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the Clearing
Agency Participants pursuant to the Note Depository Agreement; and unless and
until Definitive Notes are issued pursuant to Section 2.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest and other amounts on
the Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing Agency
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communication specified herein to be given to Noteholders to the Clearing
Agency.
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SECTION 2.12 Definitive Notes. If (i) the Administrator
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a successor, (ii) the Administrator at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, a Servicer Default or an Administrator Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Clearing Agency (which shall then
notify the Indenture Trustee) in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Note Owners, then the Indenture Trustee shall cause the Clearing Agency to
notify all Note Owners, through the Clearing Agency, of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners requesting
the same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as Noteholders.
ARTICLE III
Covenants
SECTION 3.1 Payment to Noteholders. The Issuer shall duly and
punctually pay the principal of, interest, if any, on and any Note Interest
Carryover (but only to the extent provided in Sections 2.7(d) and 8.2(c)) with
respect to the Notes in accordance with the terms of the Notes and this
Indenture. Without limiting the foregoing, subject to Section 8.2(c), the Issuer
shall cause to be distributed to Noteholders in accordance with the
Administration Agreement that portion of the amounts on deposit in the Trust
Accounts on a Distribution Date (other than any Eligible Investments deposited
therein that will mature on the Business Day preceding a subsequent Distribution
Date) which the Noteholders are entitled to receive pursuant to the
Administration Agreement. Amounts properly withheld under the Code by any Person
from a payment to any Noteholder of interest (including any Note Interest
Carryover) and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
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SECTION 3.2 Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Brooklyn, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As
provided in Section 8.2(a) and (b), all payments of amounts due and payable with
respect to any Notes that are to be made from amounts distributed from the
Collection Account or any other Trust Account pursuant to Section 8.2(c) shall
be made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so distributed from the Collection Account for payments of
Notes shall be paid over to the Issuer except as provided in this Section.
On or before the Business Day next preceding each Distribution
Date and Redemption Date, the Issuer shall distribute or cause to be distributed
to the Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient
to pay the amounts then becoming due under the Notes, such sum to be held in
trust for the benefit of the Persons entitled thereto and (unless the Paying
Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of
its action or failure so to act.
The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section, that such Paying Agent will:
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(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after
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such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request or if the Issuer has been terminated to
Seller; and the Noteholder thereof shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Noteholders whose Notes
have been called but have not been surrendered for redemption or whose right to
or interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Noteholder).
SECTION 3.4 Existence. The Issuer shall keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.5 Protection of Indenture Trust Estate. The Issuer
will from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, will take
such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
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(ii) perfect, publish notice of or protect the validity of any
grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate
and the rights of the Indenture Trustee and the Noteholders in such Indenture
Trust Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section.
SECTION 3.6 Opinions as to Indenture Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture as is
necessary to perfect and make effective the lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before December 31 in each calendar year, beginning in 1997,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture
and any indentures supplemental hereto as is necessary to maintain the lien and
security interest created by this Indenture and relating the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, recording and refiling of this
Indenture and any indentures supplemental hereto that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until December 31 in the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Trust
Student Loans. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture, any other Basic
Document or such other instrument or agreement.
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(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer; provided, however,
the Issuer shall not be liable for any acts of Persons with whom the Issuer has
contracted with reasonable care. Initially, the Issuer has contracted with the
Servicer and the Administrator to assist the Issuer in performing its duties
under this Indenture. The Issuer shall give written notice to the Indenture
Trustee and each Rating Agency of any such contract with any other Person.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and the instruments and agreements included in the Indenture Trust
Estate, including filing or causing to be filed all UCC financing statements and
continuation statements prepared by the Issuer and required to be filed by the
terms of this Indenture and the Administration Agreement in accordance with and
within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee or the Noteholders of at least a majority of
the Outstanding Amount of the Notes. The Issuer shall give written notice to
each Rating Agency of any such waiver, amendment, modification, supplement or
termination.
(d) If a Responsible Officer of the Issuer shall have knowledge of the
occurrence of a Servicer Default or an Administrator Default under the Servicing
Agreement or the Administration Agreement, respectively, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Servicing Agreement, or an
Administrator Default shall arise from the failure of the Administrator to
perform any of its duties or obligations under the Administration Agreement, as
the case may be, with respect to the Trust Student Loans, the Issuer shall take
all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.
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(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers, pursuant to Section 5.1 of
the Servicing Agreement, or to the Administrator of the Administrator's rights
and powers, pursuant to Section 5.1 of the Administration Agreement, the Issuer
shall appoint a successor servicer (the "Successor Servicer") or a successor
administrator (the "Successor Administrator"), respectively, and such Successor
Servicer or Successor Administrator, as the case may be, shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer or Successor Administrator has
not been appointed and accepted its appointment at the time when the Servicer or
Administrator, as the case may be, ceases to act as Servicer or Administrator,
respectively, the Indenture Trustee without further action shall automatically
be appointed the Successor Servicer or Successor Administrator, as the case may
be. The Indenture Trustee may resign as the Servicer or the Administrator by
giving written notice of resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new servicer or a new administrator enters into an agreement
with the Issuer as provided below; provided, however, that nothing herein shall
require or permit the Indenture Trustee to act as Servicer, or otherwise service
the Trust Student Loans, in violation of the Higher Education Act. Upon delivery
of any such notice to the Issuer, the Issuer shall obtain a new servicer as the
Successor Servicer under the Servicing Agreement or a new administrator as the
Successor Administrator under the Administration Agreement, as the case may be.
Any Successor Servicer or Successor Administrator, other than the Indenture
Trustee, shall (i) be an established institution (A) that satisfies any
requirements of the Higher Education Act applicable to servicers and (B) whose
regular business includes the servicing or administration of student loans and
(ii) enter into a servicing agreement or an administration agreement,
respectively, with the Issuer having substantially the same provisions as the
provisions of the Servicing Agreement and the Administration Agreement, as
applicable. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new servicer or new
administrator, as the case may be, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Servicer or
Successor Administrator; provided, however, that such right to appoint or to
petition for the appointment of any such successor shall in
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no event relieve the Indenture Trustee from any obligations otherwise imposed on
it under the Basic Documents until such successor has in fact assumed such
appointment. In connection with any such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Servicing Agreement or Administration Agreement, as applicable, and in
accordance with Section 5.2 of the Servicing Agreement and Section 5.2 of the
Administration Agreement, the Issuer shall enter into an agreement with such
successor for the servicing or administration of the Trust Student Loans (such
agreement to be in form and substance satisfactory to the Indenture Trustee). If
the Indenture Trustee shall succeed as provided herein to the Servicer's duties
as Servicer with respect to the Trust Student Loans, or the Administrator's
duties with respect to the Issuer and the Trust Student Loans, as the case may
be, it shall do so in its individual capacity and not in its capacity as
Indenture Trustee and, accordingly, the provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in its duties as the successor to the
Servicer or the Administrator, as the case may be, and the servicing or
administration of the Trust Student Loans. In case the Indenture Trustee shall
become successor to the Servicer or the Administrator, the Indenture Trustee
shall be entitled to appoint as Servicer or as Administrator, as the case may
be, any one of its Affiliates, provided that such appointment shall not affect
or alter in any way the liability of the Indenture Trustee as Successor Servicer
or Successor Administrator, respectively, in accordance with the terms hereof.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, or any termination of the Administrator's rights and
powers pursuant to the Administration Agreement, as the case may be, the Issuer
shall promptly notify the Indenture Trustee and each Rating Agency. As soon as a
Successor Servicer or a Successor Administrator is appointed, the Issuer shall
notify the Indenture Trustee and each Rating Agency of such appointment,
specifying in such notice the name and address of such Successor Servicer or
such Successor Administrator.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any
19
amendment, modification, supplement, termination, waiver or surrender of, the
terms of any Collateral or the Basic Documents, except to the extent otherwise
provided in the Basic Documents, or waive timely performance or observance by
the Servicer, the Administrator, the Seller, the Student Loan Marketing
Association, the Issuer or the Eligible Lender Trustee under the Basic
Documents; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
distributions that are required to be made for the benefit of the Noteholders,
or (ii) reduce the aforesaid percentage of the Notes which are required to
consent to any such amendment, without the consent of the Noteholders of all the
Outstanding Notes. If any such amendment, modification, supplement or waiver
shall be so consented to by the Indenture Trustee or such Noteholders, the
Issuer shall give written notice thereof to each Rating Agency and agrees,
promptly following a request by the Indenture Trustee to do so, to execute and
deliver, in its own name and at its own expense, such agreements, instruments,
consents and other documents as the Indenture Trustee may deem necessary or
appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any
other Basic Document, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Indenture Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest (including any Note Interest Carryover) payable in respect
of, the Notes (other than amounts properly withheld from such payments under the
Code or applicable state law) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed upon any
part of the Indenture Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Indenture Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens and other liens
that arise by operation of law, and other than as expressly permitted by the
Basic Documents) or (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax or other lien)
security interest in the Indenture Trust Estate.
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SECTION 3.9 Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and each Rating Agency, within 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year
1998), an Officers' Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year
and of performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based
on such review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default known
to such Authorized Officers and the nature and status thereof.
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain
Terms. (a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of, interest on and any Note Interest
Carryover, if any, with respect to all Notes and the performance or observance
of every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
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(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Delaware state
tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required by
the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, interest on and Note Interest
Carryover, if any, with respect to all Notes and the performance or observance
of every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein, (C) expressly agree by means
of such supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Noteholders, (D)
unless otherwise provided in such supplemental indenture, expressly agree to
indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the Notes
and (E) expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all filings
with the Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
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(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Delaware state
tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required by
the Exchange Act).
SECTION 3.11 Successor or Transferee. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10(a), the
Person formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), SLM Student Loan Trust 1997-3 will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that SLM Student Loan Trust 1997-3 is to be so released.
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SECTION 3.12 No Other Business. The Issuer shall not engage in
any business other than financing, purchasing, owning, selling and managing the
Trust Student Loans in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14 Obligations of Servicer and Administrator. The
Issuer shall cause the Servicer to comply with Sections 3.1, 3.2 and 3.3 of the
Administration Agreement and Section 3.7 of the Servicing Agreement and the
Administrator to comply with Sections 2.9, 3.1, 3.2 and 3.3 of the
Administration Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by this Indenture and the other Basic
Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 3.17 Restricted Payments. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Eligible Lender Trustee or any owner of a beneficial
interest in the Issuer or otherwise with respect to any ownership or equity
interest or security in or of the Issuer or to the Servicer or the
Administrator, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, distributions to the Servicer, the Eligible
Lender Trustee, the Indenture Trustee, the Certificateholders, the Noteholders,
the Administrator and the Seller as contemplated by, and to the extent funds are
available for such purpose under, this Indenture and the other Basic Documents.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
other Basic Documents.
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SECTION 3.18 Notice of Events of Default. The Issuer shall
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Seller of its
obligations under the Sale Agreement, the Student Loan Marketing Association of
its obligations under the Purchase Agreement, the Servicer of its obligations
under the Servicing Agreement, or the Administrator of its obligations under the
Administration Agreement. In addition, the Issuer shall deliver to the Indenture
Trustee and each Rating Agency, within five days after the occurrence thereof,
written notice in the form of an Officers' Certificate of the Issuer of any
event which with the giving of notice and the lapse of time would become an
Event of Default under Section 5.1(iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.
SECTION 3.19 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest (including any Note Interest
Carryover) thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v)
the rights, obligations and immunities of the Indenture Trustee hereunder
(including, without limitation, the rights of the Indenture Trustee under
Section 6.7 and the obligations of the Indenture Trustee under Section 4.2) and
(vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
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(a) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.5 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.3) have been delivered to the Indenture Trustee
for cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their
respective Note Final Maturity Date, within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the expense,
of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the United
States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due to the Note Final Maturity Date;
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
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(c) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate of the Issuer, an Opinion of Counsel and (if required by
the TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and, subject to Section 11.2, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited
with the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest (including any Note Interest Carryover); but such moneys need not be
segregated from other funds except to the extent required herein or in the
Administration Agreement or required by law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.3 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 4.4 Auction of Trust Student Loans. Any Trust Student
Loans remaining in the Trust as of the end of the Collection Period immediately
preceding the earliest Distribution Date on which the Pool Balance is equal to
10% or less of the initial Pool Balance three business days prior to such
Distribution Date (the "Trust Auction Date") shall be offered for sale by the
Indenture Trustee unless the Seller has exercised its option to purchase the
Trust Estate as described in Section 6.1A of the Administration Agreement with
respect to such Distribution Date. The Seller will be deemed to have waived such
option if it fails to notify the Eligible Lender Trustee and the Indenture
Trustee of its exercise thereof in writing prior to the Indenture Trustee's
acceptance of a bid to purchase such Trust Student Loans; provided, however,
that there shall be no such offer for sale if the Indenture Trustee
27
fails to provide notice to the Seller in accordance with this Section 4.4. The
Indenture Trustee shall provide written notice to the Seller of any such offer
for sale at least 5 business days in advance of the Trust Auction Date. The
Indenture Trustee shall permit the Seller or any of its Affiliates to offer bids
only if the Pool Balance as of the applicable Trust Auction Date is equal to 10%
or less of the Initial Pool Balance. If at least two bids are received, the
Indenture Trustee shall solicit and resolicit new bids from all participating
bidders until only one bid remains or the remaining bidders decline to resubmit
bids. The Indenture Trustee shall accept the highest of such remaining bids if
it is equal to or in excess of both the Minimum Purchase Amount and the fair
market value of such Trust Student Loans as of the end of the Collection Period
immediately preceding the Trust Auction Date. If at least two bids are not
received or the highest bid after the resolicitation process is completed is not
equal to or in excess of the higher of the Minimum Purchase Amount and the fair
market value of the Trust Student Loans, the Indenture Trustee shall not
consummate such sale. The Indenture Trustee may consult, and, at the direction
of the Seller, shall consult, with a financial advisor, including and
underwriter of the Notes or the Administrator, to determine if the fair market
value of the trust Student Loans has been offered. The proceeds of any such sale
will be applied in the order of priority set forth in Section 5.4 (b). If the
sale is not consummated in accordance with the foregoing, the Indenture Trustee
may, but shall not be under any obligation to, solicit bids for sale of the
Trust Student Loans with respect to future Distribution Dates upon terms similar
to those described above, including the Seller's waiver of its option to
purchase the Trust Estate in accordance with Section 6.1A of the Administration
Agreement with respect to each such future Distribution Date.
ARTICLE V
Remedies
SECTION 5.1 Events of Default. "Event of Default," wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest (including, subject
to the limitations of Sections 2.7(d) and 8.2(c), any Note Interest Carryover)
on any Note when the same becomes due and payable, and such default shall
continue for a period of five days; or
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(ii) default in the payment of the principal of any Note when
the same becomes due and payable on the related Note Final Maturity Date; or
(iii) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in
this Section specifically dealt with),or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing having been
incorrect in any material respect as of the time when made, such default or
breach having a material adverse effect on the holders of the Notes, and such
default or breach shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given, by registered or certified mail, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the
Noteholders of at least 25% of the Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of Default
hereunder; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate in an involuntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Indenture Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an order
for relief in an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the Indenture Trust Estate, or the making by the
Issuer of any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.
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SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment. If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Noteholders of Notes representing
not less than a majority of the Outstanding Amount of the Notes may declare all
the Notes to be immediately due and payable, by a notice in writing to the
Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Noteholders of Notes representing a majority of the Outstanding
Amount of the Notes, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(a) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such Notes if the Event
of Default giving rise to such acceleration had not occurred; and
(b) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
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SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee. The Issuer covenants that if (i) default is
made in the payment of any interest (including, subject to the limitations of
Sections 2.7(d) and 8.2(c), any Note Interest Carryover) on any Note when the
same becomes due and payable, and such default continues for a period of five
days, or (ii) default is made in the payment of the principal of any Note when
the same becomes due and payable at the related Note Final Maturity Date, the
Issuer shall, upon demand of the Indenture Trustee, pay to it, for the benefit
of the Noteholders, the whole amount then due and payable on such Notes for
principal and interest (and any Note Interest Carryover), with interest upon the
overdue principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest (and any Note
Interest Carryover), at the rate specified in Section 2.7 and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.
(a) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(b) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any
31
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other, comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable, as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest (including any Note Interest Carryover) owing and
unpaid in respect of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture Trustee and
each predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the Noteholders allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Noteholders allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
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and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee, and, in the event that
the Indenture Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities. If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.5):
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(a) (i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes or
under this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other obligor
upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture, with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
with respect to the Trust Estate and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee and the
Noteholders;
(iv) sell the Indenture Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; and/or
(v) elect to have the Eligible Lender Trustee maintain
ownership of the Trust Student Loans and continue to apply collections with
respect to the Trust Student Loans as if there had been no declaration of
acceleration.
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii), unless (A) the
Noteholders of 100% of the Outstanding Amount of the Notes consent thereto, (B)
the proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such Notes
for principal and interest or (C) the Indenture Trustee determines that the
Indenture Trust Estate will not continue to provide sufficient funds for the
payment of principal of and interest on the Notes as they would have become due
if the Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Noteholders of 66-2/3% of the Outstanding Amount of the
Notes; provided, further, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii), unless (D) the proceeds
of such sale or liquidation distributable to the Certificateholders plus the
proceeds of the sale or liquidation of the Trust Estate distributable to the
Certificateholders are sufficient to pay to the Certificateholders the
outstanding Certificate Balance plus accrued and unpaid return thereon or (E)
after receipt of notice from the Eligible Lender Trustee that the proceeds of
such sale or liquidation
34
distributable to the Certificateholders plus the proceeds of the sale or
liquidation of the Trust Estate distributable to the Certificateholders would
not be sufficient to pay to the Certificateholders the outstanding Certificate
Balance plus accrued and unpaid return thereon, the Certificateholders of at
least a majority of the Certificate Balance consent thereto. In determining such
sufficiency or insufficiency with respect to clauses (B), (C), (D) and (E), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate and/or Trust Estate, as applicable, for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7;
SECOND: to the Servicer for due and unpaid Primary Servicing
Fees;
THIRD: to Noteholders for amounts due and unpaid on the Notes
for interest other than any Note Interest Carryover, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes
for such interest;
FOURTH: to Noteholders for amounts due and unpaid on the Notes
for principal, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal;
FIFTH: to the Issuer for distribution to the
Certificateholders in respect of any unpaid Certificate Balance and unpaid
return on the Certificates other than any Certificate Return Carryover;
SIXTH: to the Servicer, for any unpaid Carryover Servicing
Fees;
SEVENTH: to Noteholders for any unpaid Note Interest
Carryover, ratably, without preference or priority of any kind, according to the
amount of such Note Interest Carryover attributable to each Note;
EIGHTH: to the Issuer for distribution to the
Certificateholders of any unpaid Certificate Return Carryover; and
35
NINTH: to the Issuer, for distribution in accordance with the
terms of the Administration Agreement and the Trust Agreement.
The Indenture Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder and the
Issuer a notice that states the record date, the payment date and the amount to
be paid.
SECTION 5.5 Optional Preservation of the Trust Student Loans.
If the Notes have been declared to be due and payable under Section 5.2
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest (including any Note Interest
Carryover) on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the Indenture
Trust Estate. In determining whether to maintain possession of the Indenture
Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Noteholder shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Noteholder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Noteholders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
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(iii) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the Noteholders
of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more
Noteholders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this indenture to affect, disturb or prejudice the
rights of any other Noteholders or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Noteholders,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
any Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Noteholder.
SECTION 5.8 Restoration of Rights and Remedies. If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
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SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee or any Noteholder to exercise any right or
remedy accruing upon any Default shall impair any such right or remedy or
constitute a waiver of any such Default or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Noteholders of a
majority of the Outstanding Amount of the Notes shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Indenture Trust
Estate shall be by the Noteholders of not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Indenture Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Noteholders of less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and
38
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12 Waiver of Past Defaults. Prior to the time a
judgment or decree for payment of money due has been obtained as described in
Section 5.2, the Noteholders of not less than a majority of the Outstanding
Amount of the Notes may waive any past Default and its consequences except a
Default (a) in payment when due of principal of or interest (including, subject
to the limitations of Sections 2.7(d) and 8.2(c), any Note Interest Carryover)
on any of the Notes or (b) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of each Noteholder. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Noteholders
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this
Indenture agree, and each Noteholder by such Noteholder's acceptance of any Note
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but
39
the provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit Instituted by any Noteholder for
the enforcement of the payment of principal of or interest (including any Note
Interest Carryover) on any Note on or after the respective due dates expressed
in such Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the
Indenture Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer shall take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Seller, the Student Loan Marketing Association, the
Administrator and the Servicer, as applicable, of each of their obligations to
the Issuer, whether directly or by assignment, under or in connection with the
Sale Agreement, the Purchase Agreement, the Administration Agreement and the
Servicing Agreement, respectively, in accordance with the terms thereof, and to
exercise any and all rights,
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remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Sale Agreement, the Purchase Agreement, the Administration
Agreement and the Servicing Agreement, as the case may be, to the extent and in
the manner directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Seller, the Student Loan Marketing
Association, the Administrator or the Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by the Seller, the Student Loan Marketing Association, the Administrator or the
Servicer of each of their obligations under the Sale Agreement, the Purchase
Agreement, the Administration Agreement and the Servicing Agreement,
respectively.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the written direction of the Noteholders of
66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller, the
Student Loan Marketing Association, the Administrator or the Servicer under or
in connection with the Sale Agreement, the Purchase Agreement, the
Administration Agreement and the Servicing Agreement, respectively, including
the right or power to take any action to compel or secure performance or
observance by the Seller, the Student Loan Marketing Association, the
Administrator or the Servicer of each of their obligations to the Issuer
thereunder, whether directly or by assignment, and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale Agreement, the
Purchase Agreement, the Administration Agreement and the Servicing Agreement,
respectively, and any right of the Issuer to take such action shall be
suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct such person's own affairs.
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(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the requirements of this
Indenture; provided, however, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the other Basic Documents.
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(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(g) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Trust
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Trust Student Loans.
(h) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(i) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 6.2 Rights of Indenture Trustee.. The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officers' Certificate of the Issuer
and/or an Opinion of Counsel. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
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(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.3 Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults; Seller Insolvency. (a) If a
Default occurs and is continuing and if it is either actually known or written
notice of the existence thereof has been delivered to a Responsible Officer of
the Indenture Trustee, the Indenture Trustee shall mail notice of the Default to
each Noteholder within 90 days and to each Rating Agency as soon as practicable
within 30 days after it occurs. Except in the case of a Default in payment of
principal of or interest (including any Note Interest Carryover) on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders. Except as provided in the first
sentence of this Section 6.5(a), in no event shall the Indenture Trustee be
deemed to have knowledge of a Default or an Event of Default.
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(b) If the Indenture Trustee receives notice from the Eligible Lender
Trustee of the occurrence of an Insolvency Event with respect to the Seller
pursuant to Section 9.2 of the Trust Agreement, the Indenture Trustee shall give
prompt written notice to the Noteholders of the occurrence of such event and of
the effect of such event under such Section 9.2. Upon termination of the Trust
pursuant to such Section 9.2, the Indenture Trustee shall, if so directed by the
Eligible Lender Trustee, sell the Trust Estate (other than the Trust Accounts)
in a commercially reasonable manner and on commercially reasonable terms. The
proceeds of any such sale shall be treated as collections under the
Administration Agreement.
SECTION 6.6 Reports by Indenture Trustee to Noteholders. The
Indenture Trustee shall deliver to each Noteholder (and to each Person who was a
Noteholder at any time during the applicable calendar year) such information as
may be required to enable such holder to prepare its Federal and state income
tax returns. Within 60 days after each December 31 beginning with the December
31 following the date of this Indenture, the Indenture Trustee shall mail to
each Noteholder a brief report as of such December 31 that complies with TIA ss.
313(a) if required by said section. The Indenture Trustee shall also comply with
TIA ss. 313(b). A copy of each such report required pursuant to TIA ss. 313(a)
or (b) shall, at the time of such transaction to Noteholders, be filed by the
Indenture Trustee with the Commission and with each securities exchange, if any,
upon which the Notes are listed, provided that the Issuer has previously
notified the Indenture Trustee of such listing.
SECTION 6.7 Compensation and Indemnity. The Issuer shall cause
the Seller to pay to the Indenture Trustee reasonable compensation for its
services in accordance with a separate agreement between the Seller and the
Indenture Trustee and shall cause the Seller to reimburse the Indenture Trustee
for all reasonable out-of-pocket expenses incurred or made by it as provided in
such separate agreement. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Administrator to indemnify the Indenture Trustee and its
directors, officers, employees and agents against any and all loss, liability or
expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties
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hereunder and under the other Basic Documents. The Indenture Trustee shall
notify the Issuer and the Administrator promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Issuer shall
cause the Administrator to defend the claim and the Administrator shall not be
liable for the legal fees and expenses of the Indenture Trustee after it has
assumed such defense; provided, however, that, in the event that there may be a
conflict between the positions of the Indenture Trustee and the Administrator in
conducting the defense of such claim, the Indenture Trustee shall be entitled to
separate counsel acceptable to it in its sole discretion the reasonable fees and
expenses of which shall be paid by the Administrator on behalf of the Issuer.
Neither the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee through
the Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee. No resignation
or removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Noteholders of a majority
in Outstanding Amount of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture
Trustee;
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(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee. The successor Indenture Trustee
shall give notice of its appointment as successor Indenture Trustee to the
Rating Agencies.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Administrator's obligations under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee,
provided that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
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In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No such appointment shall relieve the Indenture Trustee of its
obligations hereunder. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Indenture Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Indenture Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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SECTION 6.11 Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA ss. 310(a) and the
requirements of an "eligible lender" under 20 USC ss.1085(d). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long-term senior unsecured debt rating of not less than investment grade by
each of the Rating Agencies. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be furnished to
the Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Noteholders as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.2 Preservation of Information; Communications to
Noteholders. The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 and the names and addresses of Noteholders received by the Indenture Trustee
in its capacity as Note Registrar. The Indenture Trustee may destroy any list
furnished to it as provided in such Section 7.1 upon receipt of a new list so
furnished.
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(a) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more holders of Notes evidencing not less than 25% of
the Outstanding Amount of the Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA ss. 312(b)), the Indenture
Trustee shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
(c) On each Distribution Date the Indenture Trustee shall provide to
each Noteholder of record as of the related Record Date the information provided
by the Administrator to the Indenture Trustee on the related Determination Date
pursuant to Section 2.9 of the Administration Agreement.
(d) The Indenture Trustee shall furnish to the Noteholders promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Indenture Trustee under the Basic Documents. The
Indenture Trustee shall furnish to the Noteholders promptly upon receipt thereof
from the Eligible Lender Trustee notice of any amendment of the Administration
Agreement pursuant to Section 8.5 of the Administration Agreement.
SECTION 7.3 Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
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(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss. 313(c))
such summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of Noteholders
pursuant to the Administration Agreement as provided in this Indenture. Except
as otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Indenture Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default under this Indenture and any
right to proceed thereafter as provided in Article V.
SECTION 8.2 Trust Accounts. (a) On or prior to the Closing
Date, the Issuer shall cause the Administrator to establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 2.3 of the
Administration Agreement.
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(b) On or before the Business Day preceding each Distribution Date, all
Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 2.4 of the
Administration Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount and any Note Interest Carryover, if any, with respect to the
preceding Collection Period will be distributed from the Collection Account and
any other Trust Account to the Indenture Trustee (or any other Paying Agent) on
behalf of the Noteholders as provided in Sections 2.7 and 2.8 of the
Administration Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of Noteholders pursuant to paragraph (b) above to Noteholders in
respect of the Notes to the extent of amounts payable on the Notes for
principal, interest and any Note Interest Carryover in the following amounts and
in the following order of priority (except as otherwise provided in Section
5.4(b)):
(i) the Noteholders' Interest Distribution Amount, to the
Noteholders in an amount equal to the accrued and unpaid interest on the Notes
at the respective Note Rates; provided that if there are not sufficient funds
received to pay the entire amount of accrued and unpaid interest then due on the
Notes at the respective Note Rates, the amounts so received shall be applied to
the payment of such interest on the Notes on a pro rata basis;
(ii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-1 Notes until the Outstanding Amount of the Class A-1
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-1 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-1 Notes on
a pro rata basis;
(iii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-2 Notes until the Outstanding Amount of the Class A-2
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-2 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-2 Notes on
a pro rata basis; and
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(iv) the Note Interest Carryover, if any, to the Noteholders;
provided that if insufficient funds are received to pay the entire Note Interest
Carryover, the amounts so received shall be applied to the payment of such Note
Interest Carryover on a pro rata basis.
SECTION 8.3 General Provisions Regarding Accounts. (a) So long
as no Default shall have occurred and be continuing, all or a portion of the
funds in the Trust Accounts shall be invested in Eligible Investments and
reinvested by the Indenture Trustee upon Issuer Order, subject to the provisions
of Section 2.3B of the Administration Agreement. All income or other gain from
investments of moneys deposited in the Trust Accounts shall be deposited by the
Indenture Trustee in the Collection Account, and any loss resulting from such
investments shall be charged to such Trust Account. The Issuer will not direct
the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable for the selection of Eligible Investments or by reason of any
insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Indenture Trustee's failure to make payments on such Eligible Investments issued
by the Indenture Trustee, in its commercial capacity as principal obligor and
not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.2, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.5 as if there had not been such a declaration; then the Indenture
Trustee shall invest and reinvest funds in the Trust Accounts in the Eligible
Investments described in clause (d) of the definition thereof.
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SECTION 8.4 Release of Indenture Trust Estate.. (a) Subject to
the payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officers' Certificate of the Issuer, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in accordance with TIA xx.xx.
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that
from time to time the Indenture Trustee shall release the lien of this Indenture
on any Trust Student Loan to be sold to (i) the Seller in accordance with
Section 6 of the Sale Agreement, (ii) to the Servicer in accordance with Section
3.5 of the Servicing Agreement and (iii) to another eligible lender holding one
or more Serial Loans with respect to such Trust Student Loan, in accordance with
Section 3.11E of the Servicing Agreement, and each Noteholder, by the acceptance
of a Note, consents to any such release.
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SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Indenture Trust Estate. Counsel rendering
any such opinion may rely, without independent investigation, on the accuracy
and validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders. Without the consent of any Noteholders but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and in
the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
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(iv) to convey, transfer, assign, mortgage or pledge any
property to the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be inconsistent with
any other provision herein or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising under this Indenture or
in any supplemental indenture; provided that such action shall not materially
adversely affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be expressly
required by the TIA.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
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SECTION 9.2 Supplemental Indentures with Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the consent
of the Noteholders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Noteholders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Noteholders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Noteholder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest (including any Note Interest Carryover) on any Note, or reduce
the principal amount thereof, the interest rate thereon or the Redemption Price
with respect thereto, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Indenture
Trust Estate to payment of principal of or interest (including any Note Interest
Carryover) on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article V,
to the payment of any such amount due on the Notes on or after the respective
due dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Noteholders of which is required for any such
supplemental indenture, or the consent of the Noteholders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.4;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional provisions
of this Indenture or the other Basic Documents cannot be modified or waived
without the consent of the Noteholder of each Outstanding Note affected thereby;
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(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of interest
(including any Note Interest Carryover) or principal due on any Note on any
Distribution Date (including the calculation of any of the individual components
of such calculation) or to affect the rights of the Noteholders to the benefit
of any provisions for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the Indenture
Trust Estate or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any property at any time subject hereto or deprive
any Noteholder of any Note of the security provided by the lien of this
Indenture.
It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Indenture
Trustee shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
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SECTION 9.4 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as to
any matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption. The Indenture Trustee shall, upon
receipt of written notice from the Eligible Lender Trustee or the Depositor
pursuant to Section 9.2 of the Trust Agreement of an Insolvency Event with
respect to the Depositor, give prompt written notice to the Noteholders of the
occurrence of such event. In the event that the assets of the Trust are sold
pursuant to Section 9.2 of the Trust Agreement, that portion of the amounts on
deposit in the Trust Accounts to be distributed to the Noteholders shall be paid
to the Noteholders up to the Outstanding Amount of the Notes and all accrued and
unpaid interest thereon and any accrued Note Interest Carryover with respect
thereto (but only to the extent provided by Sections 2.7(d) and 8.2(c)). If
amounts are to be paid to Noteholders pursuant to this Section 10.1, the notice
of such event from the Indenture Trustee to the Noteholders shall include notice
of the redemption of Notes by application of such amounts on the next
Distribution Date which is not sooner than 15 days after the date of such notice
(the "Redemption Date"), whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.2 Form of Redemption Notice. Notice of redemption
under Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each Noteholder, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Noteholder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place were such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.2).
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Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Noteholder of any Note shall
not impair or affect the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc. Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and the Rating Agencies (i) an Officers' Certificate of the
Issuer stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that, in the case of
any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
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(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Rating
Agencies an Officers' Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Rating Agencies an Officers' Certificate of the Issuer
certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the Notes.
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(iii) Other than any property released as contemplated by
clause (v) below, whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the opinion
of each person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate of the Issuer certifying or stating
the opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated by
clause (v) below, or securities released from the lien of this Indenture since
the commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals 10% or
more of the Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the fair value
thereof as set forth in the related Officers' Certificate is less than $25,000
or less than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of
Trust Student Loans as and to the extent permitted or required by the Basic
Documents, (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents and (C) convey to the Seller, the
Servicer or another eligible lender those specified Trust Student Loans as and
to the extent permitted or required by and in accordance with Section 8.4(c)
hereof and Section 6 of the Sale Agreement, Section 3.5 of the Servicing
Agreement or Section 3.11E of the Servicing Agreement, respectively, so long as
the Issuer shall deliver to the Indenture Trustee every six months, commencing
April 27, 1998, an Officers' Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
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SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters, and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
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SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the Noteholder
of every Note issued upon registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder, the Servicer, the
Administrator or by the Issuer shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the Indenture Trustee
at its Corporate Trust Office, or
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(b) The Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: SLM Student Loan Trust 1997-3, in
care of Chase Manhattan Bank USA, National Association, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Department; with copies
to The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx 00xx Xx., Xxx Xxxx, Xxx Xxxx
00000, Attention: Structured Finance Services; 00000 Xxxxxx Xxx Xxxxx, Xxxxxx,
XX 00000, Attention: Director, Corporate Finance Operations, or any other
address previously furnished in writing to the Indenture Trustee by the Issuer
or the Administrator. The Issuer shall promptly transmit any notice received by
it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Eligible Lender Trustee shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, to (i) in the case of Moody's, at the following address: Moody's, ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's, 00
Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed
Surveillance Department, and (iii) in the case of Fitch, at the following
address: Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention Municipal
Structured Finance Group; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Noteholder providing
for a method of payment, or notice by the Indenture Trustee or any Paying Agent
to such Noteholder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer will furnish to the Indenture
Trustee a copy of each such agreement and the Indenture Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
68
SECTION 11.8 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successor and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind the successors, co-trustees and
agents (excluding any legal representatives or accountants) of the Indenture
Trustee.
SECTION 11.10 Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 Governing Law. This Indenture shall be construed
in accordance with the laws of the State of New York, without reference to its
conflict of law provisions (other than ss.5-1401 of the New York General
Obligations Law), and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
69
SECTION 11.14 Counterparts. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 11.16 Trust Obligations. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Seller, the Administrator, the Servicer, the Eligible Lender Trustee or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, any holder or
owner of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign thereof in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Eligible Lender Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Eligible Lender Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VI, VII and VIII of the Trust
Agreement.
SECTION 11.17 No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby covenant
and agree that they shall not at any time institute against the Seller or the
Issuer, or join in any
70
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the other Basic Documents. The foregoing shall not limit the rights of the
Indenture Trustee to file any claim in, or otherwise take any action with
respect to, any insolvency proceeding that was instituted against the Issuer by
any Person other than the Indenture Trustee.
SECTION 11.18 Inspection. The Issuer agrees that, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information obtained from such examination or
inspection except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
71
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized and duly attested, all as of the day and year first
above written.
SLM STUDENT LOAN TRUST 1997-3, by CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Eligible Lender Trustee,
by /s/ J. XXXXX XXXXXX
--------------------------
Name: J. Xxxxx Xxxxxx
Title:
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION not in its individual capacity
but solely as Eligible Lender Trustee,
by /s/ X.X. XXXXXX
-------------------------
Name: X.X. Xxxxxx
Title:
BANKERS TRUST COMPANY, not in its indi-
vidual capacity but solely as Indenture
Trustee,
by /s/ XXXXX XXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxx
Title:
72
APPENDIX A
TO THE INDENTURE
Definitions and Usage
73
SCHEDULE A
TO THE INDENTURE
Schedule of Trust Student Loans
[See Schedule A to the Xxxx of Sale
(Attachment B to the Sale Agreement)]
74
SCHEDULE B
TO THE INDENTURE
Location of Trust Student Loan Files
[See Attachment B to the Servicing Agreement]
75
EXHIBIT A
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
(as defined below) or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER $200,000,000
R-1 CUSIP NO. 78442 GAR 7
76
SLM STUDENT LOAN TRUST 1997-3
FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES
SLM Student Loan Trust 1997-3, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of 200,000,000 DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $200,000,000 and the denominator of which is
$1,456,350,000 by (ii) the aggregate amount, if any, payable to Class A-1
Noteholders on such Distribution Date in respect of principal of the Notes
pursuant to Section 3.1 of the Indenture dated as of September 1, 1997, among
the Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Eligible Lender Trustee on behalf of the Issuer, and Bankers
Trust Company, a New York banking corporation, as Indenture Trustee (the
"Indenture Trustee") (capitalized terms used but not defined herein being
defined in Appendix A to the Indenture, which also contains rules as to usage
that shall be applicable herein); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the April 2006
Distribution Date (the "Class A-1 Maturity Date").
The Issuer shall pay interest on this Note at the rate per
annum equal to the Class A-1 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 365 (or 366 in the case
of a leap year). Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
77
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
78
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-1 Student Loan-Backed Notes (the
"Class A-1 Notes"), which, together with the Issuer's Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes" and, together with the Class
A-1 Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-1 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are senior in right of payment to the Class A-2
Notes as and to the extent provided in the Indenture.
Principal of the Class A-1 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 25th day of each January, April, July and October or, if any such date
is not a Business Day, the next succeeding Business Day, commencing January 26,
1998.
As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-1 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-1 Notes shall be made pro rata to the Noteholders entitled thereto.
Interest on the Class A-1 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-1 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-1 Rate. The "Class A-1 Rate" for each Accrual Period shall be equal
to the lesser of (a) the daily weighted average of the T-Xxxx Rates within such
Accrual Period plus 0.60% per
79
annum and (b) the Student Loan Rate for such Accrual Period. The "Student Loan
Rate" for any Accrual Period shall equal the product of (a) the quotient
obtained by dividing (i) 365 (or 366 in the case of a leap year) by (ii) the
actual number of days elapsed in such Accrual Period and (b) the percentage
equivalent of a fraction, (i) the numerator of which is equal to Expected
Interest Collections for the Collection Period relating to such Accrual Period
less the Primary Servicing Fee and the Administration Fee with respect to such
Collection Period, and (ii) the denominator of which is the Pool Balance as of
the first day of such Collection Period.
Any Note Interest Carryover that may exist on any Distribution
Date attributable to the Notes shall be payable to the Noteholders on that
Distribution Date and any succeeding Distribution Dates, solely out of the funds
available and required to be applied thereto pursuant to the Administration
Agreement.
Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.
80
The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP (all in accordance with the Exchange Act), and such other documents
as the Indenture Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount shall be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
81
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
82
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither Bankers Trust Company in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
83
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
----------------------
*/
-------------------------
Signature Guaranteed:
*/
-------------------------
----------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
84
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
(as defined below) or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER $200,000,000
R-1 CUSIP NO. 78442 GAS 5
85
SLM STUDENT LOAN TRUST 1997-3
FLOATING RATE CLASS A-2 STUDENT LOAN-BACKED NOTES
SLM Student Loan Trust 1997-3, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of 200,000,000 DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $200,000,000 and the denominator of which is
$1,028,500,000 by (ii) the aggregate amount, if any, payable to Class A-2
Noteholders on such Distribution Date in respect of principal of the Notes
pursuant to Section 3.1 of the Indenture dated as of September 1, 1997, among
the Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Eligible Lender Trustee on behalf of the Issuer, and Bankers
Trust Company, a New York banking corporation, as Indenture Trustee (the
"Indenture Trustee") (capitalized terms used but not defined herein being
defined in Appendix A to the Indenture, which also contains rules as to usage
that shall be applicable herein); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the October 2010
Distribution Date (the "Class A-2 Maturity Date").
The Issuer shall pay interest on this Note at the rate per
annum equal to the Class A-2 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 365 (or 366 in the case
of a leap year). Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
86
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
87
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed, manually or in facsimile, as of the date set forth below.
SLM STUDENT LOAN TRUST 1997-3
by CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee under
the Trust Agreement,
by
-------------------------
Authorized Signatory
Date: September 11, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual capacity
but solely as Indenture Trustee,
by
-------------------------
Authorized Signatory
Date: September 11, 1997
88
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-2 Student Loan-Backed Notes (the
"Class A-2 Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes" and, together with the Class
A-2 Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-2 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are senior in right of payment to the Class A-2
Notes as and to the extent provided in the Indenture.
Principal of the Class A-2 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 25th day of each January, April, July and October or, if any such date
is not a Business Day, the next succeeding Business Day, commencing January 26,
1998.
As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-2 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Noteholders entitled thereto.
Interest on the Class A-2 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-2 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-2 Rate. The "Class A-2 Rate" for each Accrual Period shall be equal
to the lesser of (a) the daily
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weighted average of the T-Xxxx Rates within such Accrual Period plus 0.64% per
annum and (b) the Student Loan Rate for such Accrual Period. The "Student Loan
Rate" for any Accrual Period shall equal the product of (a) the quotient
obtained by dividing (i) 365 (or 366 in the case of a leap year) by (ii) the
actual number of days elapsed in such Accrual Period and (b) the percentage
equivalent of a fraction, (i) the numerator of which is equal to Expected
Interest Collections for the Collection Period relating to such Accrual Period
less the Primary Servicing Fee and the Administration Fee with respect to such
Collection Period, and (ii) the denominator of which is the Pool Balance as of
the first day of such Collection Period.
Any Note Interest Carryover that may exist on any Distribution
Date attributable to the Notes shall be payable to the Noteholders on that
Distribution Date and any succeeding Distribution Dates, solely out of the funds
available and required to be applied thereto pursuant to the Administration
Agreement.
Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such
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Distribution Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-2 Rate to the extent lawful.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP (all in accordance with the Exchange Act), and such other documents
as the Indenture Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount shall be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual
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capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Eligible Lender Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder or Note Owner
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture
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Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither Bankers Trust Company in its
individual capacity, Chase Manhattan Bank USA, National Association in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Eligible Lender Trustee for the sole purposes of binding the interests of
the Eligible Lender Trustee in the assets of the Issuer. The Noteholder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall
93
have no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to
prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Note.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
--------------------
*/
-------------------------
Signature Guaranteed:
*/
-------------------------
----------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
95
EXHIBIT B
TO THE INDENTURE
Note Depository Agreement
-------------------------
96
